Explain how the trend in the inflation rate has affected the use of conventional monetary policy since the beginning of 2022. 3 marks

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The increasing trend in the inflation rate, to a level well beyond the RBA’s range of 2-3% (on over time) has caused the RBA to use conventional monetary policy in a less and/or way to return the rate of inflation back into the target zone. Beginning in early 2022, the RBA monetary policy by increasing the cash rate from a very low level to make monetary policy less expansionary. This continued into 2023, with the RBA increasing the cash rate to a restrictive 3.6% by April 2023.